Input tax credit on purchase tax for Schedule VIII goods cannot be denied merely because the supplier was unregistered.

Under the Tripura Value Added Tax Act, 2004, purchase tax on Schedule VIII goods such as raw rubber was levied at the buyer's end, and input tax credit was available on taxable purchases of those goods. The statutory scheme did not confine credit to purchases from registered dealers where the tax liability arose on the purchaser and had been duly discharged. Accordingly, once purchase tax had been paid in accordance with law, input tax credit could not be denied merely because the raw rubber was bought from unregistered dealers. Denial of credit on that sole ground was unsustainable.

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Issues: Whether input tax credit could be denied on purchase tax paid on raw rubber, being a Schedule VIII commodity, merely because some purchases were made from unregistered dealers under the Tripura Value Added Tax Act, 2004.

Analysis: The statutory scheme distinguished between tax on sale and tax on purchase. Raw rubber was a Schedule VIII commodity, and the levy under Section 5A fastened purchase tax on the buyer. Section 10 permitted input tax credit on taxable purchases of Schedule VIII goods. The statutory text did not impose a restriction confining credit only to purchases from registered dealers where the goods were those liable to purchase tax at the purchaser's end. Once purchase tax had been paid in accordance with law on such goods, the taxpayer was entitled to claim corresponding credit, irrespective of whether the supplier was registered or unregistered.

Conclusion: Denial of input tax credit on the sole ground that the goods were purchased from unregistered dealers was unsustainable.

Ratio Decidendi: Where a statute levies purchase tax on Schedule VIII goods at the buyer's end and permits input tax credit on taxable purchases of such goods, credit cannot be denied merely because the seller was unregistered, provided the purchase tax liability has been duly discharged.

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